- Stellar crypto price surged after announcing a major deal with DTCC.
- The deal will solidify its stay as a major player in the tokenization industry.
- There is a risk that the XLM token has become highly overbought.
Stellar crypto price pulled back to $0.2587 on Saturday from this week’s high of $0.2967 as investors booked profits after a highly successful month. It remains up by 85% from its lowest point this week. So, what’s next for the XLM token?
Stellar Crypto Price in Focus After DTCC Deal
Stellar, a crypto project started by a former Ripple co-founder, came into the spotlight this week after announcing a major partnership with the Depository Trust & Clearing Corporation (DTCC). DTCC, which handles transactions worth trillions of dollars a month, will use its technology to tokenize custodied assets.
The new development will enable market participants to leverage traditional assets in a digital ecosystem, allowing faster settlement, greater asset mobility, and extended trading hours. It will also dramatically lower costs as Stellar’s network has some of the lowest costs in the crypto industry.
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This is a major development for Stellar, a network that has become a major player in the real-world asset (RWA) tokenization industry. For one, data compiled by RWA shows that it has over $1.82 billion in distributed asset value (DAV) in its platform. It has inked major partnerships with companies like Amundi, Franklin Templeton, WisdomTree, and Janus Henderson.
The announcement led to a surge in demand for the XLM token, with its 24-hour volume soaring to over $2 billion. Its futures volume jumped to $4.32 billion, while the open interest rose to over $362 million.
XLM price also jumped amid hopes of a deal between the US and Iran. Media reports suggest that Iranians sent their requests to the US, with Trump expected to make the “final determination” soon. This explains why Bitcoin and top altcoins rose modestly during the week.
The risk for Stellar, however, is that investors may start selling the DTCC news since its implementation is still further away. It is common for a crypto asset to surge immediately after a major news break and then retreat once the hype fades.
XLM Price Technical Analysis
The daily chart also explains why the XLM token surged. It happened after the coin formed a triple-bottom pattern at $0.1462, its lowest level in February, March, and April this year. Its neckline was at $0.1845, its highest point on April 21 this year.
The coin’s surge pushed it above the 50-day and 100-day moving averages, a sign that bulls have prevailed. However, the risk is that it has become highly overbought, with the Relative Strength Index (RSI) soaring to the extreme level of 86.
Both lines of the Stochastic Oscillator have moved to the extreme overbought level. Therefore, the coin will likely retreat and retest the key support level at $0.1845.
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